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NFL teams score big on getting public money for stadiums

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  • City’s goal: Millions to keep Panthers in Charlotte
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    Detailing Panthers’ deal

    The Carolina Panthers have proposed a significant renovation to 17-year-old Bank of America Stadium.

    Under the team’s plan, the city of Charlotte would spend $125 million for capital improvements. Over 15 years, the city would also pay $15 million for stadium maintenance and $375,000 for game-day traffic control.

    The state is being asked to pay $62.5 million.

    The team would spend $62.5 million. It would also spend $15 million over 15 years on stadium maintenance. The team would also give the city and the Charlotte Regional Visitors Authority five rent-free days each year for 15 years. The team values that at $18.75 million, but the CRVA must find sporting events and concerts that want to use the stadium.

    Steve Harrison

As the Carolina Panthers scramble for public money to upgrade their stadium, other NFL teams are getting significant help from state and local governments.

Of the 20 stadiums built or renovated since 1997, a year after Bank of America Stadium opened, all but one have used public money. Things as diverse as food, property and hotel taxes and lottery proceeds have supplemented private funds.

And the list doesn’t include three teams currently planning new stadiums or upgrades, each of which expects significant public investment.

A city of Charlotte plan to contribute $144 million toward the Panthers’ improvements in exchange for the team’s promise to stay for 15 years has run into resistance from state legislators who would have to authorize it. And Gov. Pat McCrory and Republican House Speaker Thom Tillis of Cornelius have rejected the team’s request for $62 million from the state.

Meanwhile a bipartisan group of lawmakers is pushing a bill that would allow the city to use existing taxes, though the money falls short of what the team has said it needs. That bill is expected to go before the House Finance Committee this week.

Without public help, and a so-called tether, some fear the team would move.

Last fall, Los Angeles Mayor Antonio Villaraigosa privately courted Panthers officials in Charlotte.

Marc Ganis, who has been involved in stadium projects across the country as president of Chicago-based Sportscorp, has seen NFL franchises leave cities, including Los Angeles, Cleveland, St. Louis and Houston.

In the NFL context, he says, the Panthers’ proposal is “well balanced and exceedingly modest.”

“There’s an old saying, ‘penny-wise and pound-foolish,’ ” he says. “That’s the way I view what’s going on in North Carolina right now.”

The Panthers’ case wasn’t helped this month, politically, when the website Deadspin published documents showing the team made $100 million in profit in 2010 and 2011. The team called the report an “incomplete picture” and said its cash flow those years was $66.5 million, in line with other NFL teams.

Last year all 32 NFL teams made Forbes’ list of the 50 most valuable sports franchises in the world. The Panthers ranked 23rd with a value of $1 billion.

At a recent legislative hearing, lawmakers on both the left and the right questioned public help for a private business, especially such a profitable one.

Panthers’ President Danny Morrison, whose team would contribute at least $62 million toward the nearly $250 million upgrade, declined to comment last week on the status of the public funding efforts.

The team has said it has paid more than $215 million in state and local taxes while spending $534 million on construction, improvements and financing for the 17-year-old stadium.

The Charlotte Chamber, which touts professional sports franchises when recruiting outside businesses to the area, has urged lawmakers to help the team.

“We’re saying we have an opportunity to tether the team to the community for 15 years; let’s figure it out,” Charlotte Chamber President Bob Morgan said. “We think it’s reasonable for the state to participate financially.”

The Chamber, he said, wants to “create a sense of urgency and … not let this opportunity get away from us.”

Other cities pay up

Around the country, teams are getting substantial public help.

Since 1997, teams have gotten public help reaching as high as $619 million for Indianapolis’ Lucas Oil Stadium, according to a report by Conventions, Sports & Leisure International, a consulting firm.

• The Atlanta Falcons and the city of Atlanta recently struck a deal to build a new $1 billion stadium to replace the Georgia Dome, built in 1992. The team will spend $800 million, with the city of Atlanta using $200 million in existing hotel/motel taxes and millions more to operate it.

• In Minnesota, the Vikings plan to replace the 31-year-old Metrodome. The $950 million cost would be about evenly split between the team and taxpayers.

The city of Minneapolis will spend $150 million from existing convention center taxes – a plan similar to what the General Assembly has proposed for Charlotte. The state would contribute $348 million, funded in part from electronic pull-tabs and bingo, according to the team.

The city will also spend $7.5 million to help operate and maintain the new stadium. The Vikings will spend $13 million for annual costs.

Before the deal was reached, the Vikings had been considered a candidate to move to Los Angeles – the nation’s largest city without the NFL since losing two teams in 1994.

• Another team linked as a candidate to move to California is the Buffalo Bills, whose home, Ralph Wilson Stadium, was built in the early 1970s.

Under a deal reached in December, New York state will pay $54 million while Erie County will spend $41 million to improve the stadium. The team will contribute $35 million.

The nearly $100 million in public money will keep the team in Buffalo for 10 years. But the deal allows the team to break its lease after seven years for only a $28 million fee, according to USA Today.

The Buffalo deal would buy the city a year of football for about $14 million, on average.

Andrew Zimbalist, an economics professor at Smith College, says smaller market teams such as Buffalo – and the Panthers – generally get more public support than large market franchises.

But he doubts the economic impact that team owners and some public officials say a team brings.

“The independent people who have looked at this,” he said, “come to the conclusion that the average stadium and the average team does not have a positive economic impact.”

In February, Atlanta Mayor Kasim Reed spoke to the Charlotte City Council amid the city’s debate on providing money for the Panthers. He warned that cities can’t afford to lose the nation’s most popular sports league.

His message: “No mayor who has played the stadium game has won.”

Charlotte Mayor Anthony Foxx and council members followed Reed’s advice, endorsing a plan to give the team $144 million in exchange for a 15-year commitment from the team to stay in Charlotte.

The stadium improvements would include escalators, new video boards and club and suite improvements. The team also wants nearly $19 million over 15 years for maintenance costs and to pay for traffic control.

Future scenarios

The Panthers proposal is difficult to compare to other recent deals.

On one hand, the requested public contribution of 75 percent is higher than many recent NFL stadium deals. But taxpayers contributed relatively little – $60 million in land and infrastructure costs – to the construction of the $187 million stadium.

The Panthers proposal is similar to how much taxpayers will pay in Buffalo each year to anchor their team to the area. Over the life of the 15-year proposal, the city and state would pay about $13.8 million per year of football in Charlotte.

NFL spokesman Greg Aiello says the league considers the proposed public investment in Bank of America Stadium relatively small compared with deals in other cities.

“Bank of America Stadium was unique in being almost completely privately financed,” Aiello said. “What the Panthers are proposing now combined with the investment they have made privately in the stadium is on the low end of public investment in recent stadium projects.”

The Panthers commissioned a study from the University of South Carolina that said the team is responsible for an annual economic impact of $636 million.

The report said the team’s direct labor income – its payroll – is $147 million. That would translate into more than $11 million in state income taxes paid.

Zimbalist, the economist, says like other teams, the Panthers have leverage.

“Look, football’s very popular and what happens invariably is a team owner says, ‘I need this, other teams have it, if I don’t have it we’re going to have a hard time fielding a competitive team … or we’re going to go somewhere else.’ ”

Panthers owner Jerry Richardson, who’s 76, has said his estate will sell the team two years after he’s gone.

Ganis said if the team is sold, a new owner could take it anywhere, just like owners did in Los Angeles and other cities that lost franchises. Even if a new owner keeps the team in Charlotte, he said, he could make big demands for public money.

If that happens, the Panthers’ current request could look good by comparison.

The costs of building new stadiums has skyrocketed, in part because fans now expect more from a game-day experience.

Said Ganis: “People will look back on it and say, ‘Oh my goodness, why did we not take this deal? How did we blow it?’ ”

Morrill: 704-358-5059
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